Dunedin Capital Partners, the independent private equity company, which manages Dunedin Enterprise Investment Trust, has almost doubled its funds under management, reaching GBP200 million. This boost in liquidity follows the merger of Dunedin Enterprise with Group Trust announced last month, creating a GBP150 million entity, assuming the name of Dunedin Enterprise. The merger has now received over 96 per cent acceptances.
This follows the news that Dunedin recently secured the initial GBP45 million close of its buyout fund, the first to be raised in ten years by the firm (see evcj June issue, fund news). Dunedin’s resulting funds under management have now reached the GBP200 million, with assets of around GBP107 million from Dunedin Enterprise and GBP48 million coming from the Group Trust. Following the merger, Dunedin Enterprise has a portfolio of 80 investments.
Ashurst Morris Crisp acted for the Group Trust on the GBP31 million recommended offer by Cazenove on behalf of Dunedin Investment Trust. The offer valued each Group Trust share at 56.5 pence, with a partial cash alternative at 58 pence per share.
At the time of the offer, Group shareholders were invited to exchange their shares for new shares in Dunedin Enterprise. The merger has since gone unconditional as to acceptances, with 96.85 per cent achieved by the first closing date on May 25. Group shareholders were elected to receive consideration in cash in respect of up to 22.7 per cent of their group shares on the basis of 58 pence in cash for each Group share. This represents an increase in value of 10 per cent in respect of each such Group share compared to the closing middle market quotation of 52.75 pence of a Group share on April 6, 2001.
Dunedin Enterprise is managed by Dunedin Capital Partners, the independent fund management company that was formed in 1996 and is 68.2 per cent owned by the management team. The remaining 31.8 per cent is held by Legal & General Ventures, the investment manager of Group Trust.
Dunedin Enterprise is co-investing alongside the buyout fund, enabling the firm to tackle larger transactions of up to GBP25 million. Ross Marshall, managing director of Dunedin, said: “The transaction provides a further opportunity to exploit the UK market for buyouts and buy-ins in the GBP10 million to GBP25 million size range.” He added: “The level of acceptances achieved by the first closing date was remarkable and we are delighted to welcome Group shareholders to the Dunedin stable.”
Like Group, Dunedin Enterprise also concentrates on management buyouts and buy-ins, although Dunedin has a particular focus on medium sized companies, where it believes there is less competition than for larger transactions. The assets of Group will be realised over time and the funds will be reinvested in transactions throughout the UK.
Dunedin led seven transactions during 2000 including the GBP12.5 million buyout in October of CRT Displays, a distributor and installer of audio-visual equipment, and the GBP17 million buyout of Letts Holdings last August.